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Fixed Income MCQ - Fixed Income Section 1

71 Which of the following statements about LTV is least accurate?

A
LTV is the ratio of the mortgage loan amount to the property’s purchase price.
B
Lower the LTV, the more likely the borrower is to default.
C
Lower the LTV, the more protection the lender has for recovering the amount loaned if the borrower defaults.

Lower the LTV, the less likely the borrower is to default.

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Bond Price and Yield

Bond prices and yields move in opposite directions. When required market yields rise, existing bond prices generally fall, and when market yields decline, existing bond prices generally increase.

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Which of the following statements is the most accurate description of nonsovereign and quasi-government bonds?

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Bonds issued by local government authorities are called non-sovereign bonds. Bonds issued by agencies that are owned or sponsored by governments are called quasi-government bonds. Additionally, bonds issued…

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